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from its active conduct of a trade or business within Puerto
Rico.
We are unable to find that such was the case. MedChem P.R.
did not actively conduct a trade or business within Puerto Rico
throughout the 3-year period. Whether MedChem P.R. actively
conducted such a trade or business is a highly fact intensive
issue as to which petitioners bear the burden of proof. Cf.
Higgins v. Commissioner, 312 U.S. 212, 217 (1941); Deputy v. du
Pont, 308 U.S. 488, 496 (1940); Welch v. Helvering, 290 U.S. 111,
115 (1933); Plymouth Sav. Bank v. United States, 187 F.3d 203,
210 (1st Cir. 1999). Because Congress has not explicitly defined
the phrase “active conduct of a trade or business” for purposes
of section 936(a) (or, for that matter, for any other purpose of
the Code), Congress has essentially left it to the Secretary to
define that phrase by way of regulations or, in the absence of
regulations, to the courts to construe the phrase by way of
judicial interpretation. As the Supreme Court observed in
construing the phrase “trade or business” for purposes of section
162(a):
The phrase “trade or business” has been in �
162(a) and in that section’s predecessors for many
years. Indeed, the phrase is common in the Code, for
it appears in over 50 sections and 800 subsections and
in hundreds of places in proposed and final income tax
regulations. The slightly longer phrases, “carrying on
a trade or business” and “engaging in a trade or
business,” themselves are used no less than 60 times in
the Code. The concept thus has a well-known and almost
constant presence on our tax-law terrain. Despite
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